Dave Says 04-24-11

Monday

Apr 25, 2011 at 7:35 AMApr 25, 2011 at 7:37 AM

Dave Ramsey

Are jobless benefits immoral?

Dear Dave,

I recently lost my job because of layoffs. I'm luckier than most because I'm debtfree except for my house, and I have three months of expenses saved. I'll also receive a severance package from my former employer and my wife still has her job. I'm struggling with whether or not to file for unemployment compensation. Do you think it's morally OK to do this?

— Brent

Dear Brent,

I don't have a problem, morally or otherwise, with accepting something I've already paid for. The Social Security system in this country is a complete and abysmal mathematical failure. But that doesn't mean I'm not going to take my money out. The government took it from me in the first place.

Now, if accepting unemployment benefits causes you to think you can sit at home and not do anything, then I'd question your character. But you sound like a hard-working guy, and you two have obviously been smart and responsible with your finances.

Make sure you look at your severance package as "survival money." You'll know exactly how much you'll get, so make a budget and make it stick. Cut all excess spending until you're working again. Then you can ease back into saving and resuming a normal lifestyle.

How about pet insurance?

Dear Dave,

What's your take on having pet insurance while building wealth in order to avoid being sidetracked by pet-related emergencies?

— Anonymous

Dear Anonymous,

We have three dogs in the Ramsey household and my wife and I love those guys a lot. However, we do not have pet insurance on any of them. You might be thinking we don't have to worry about that kind of thing, but even if we weren't financially blessed, it's just not something we would do. Instead, we figure a reasonable amount for pet care into our budget.

Reasonable expenditures to fix a sick or injured pet are absolutely fine. But ridiculous amounts of money spent on an animal — many times on the part of the human because they're so emotionally attached — can be cruel, inhumane and financially disastrous.

I'm not going to be mad at you if you have $2 million sitting in the bank and you spend $10,000 to keep your dog alive. But pet insurance? I don't think so.